Markets likely to make gap-up opening on Thursday

Indian markets finished a choppy session nearly unchanged on Wednesday as Dalal Street resumed trading after a day's holiday. Today, the markets are likely to make gap-up opening following firm global cues. Traders will be taking encouragement with a private report that India is likely to be the fastest-growing Asian economy in 2022-23. The report expect India’s gross domestic product growth to average 7 per cent during this period - the strongest among the largest economies - and contributing 28 per cent and 22 per cent to Asian and global growth, respectively. Some support will come as the data released by the Reserve Bank of India showed that Bank credit grew 14.5 per cent year-on-year as on July 29, outstripping 14 per cent year-on-year growth as on July 15. As on July 29, banks' outstanding loans were at Rs 123.69 trillion, 0.7 per cent higher than a fortnight ago. Besides, foreign institutional investors (FIIs) have net bought shares worth Rs 1,061.88 crore, whereas domestic institutional investors (DIIs) net sold shares worth Rs 768.45 crore on August 10, as per provisional data available on the NSE. However, there may be some volatility in the markets due to weekly F&O expiry. There may be some cautiousness with another private report that Investments by private equity and venture capital funds into Indian entities fell by 69 per cent to $3 billion during July. The investments in July are the lowest for any month in a year, and lower than the $4.9 billion recorded across 118 deals in the preceding month of June. Meanwhile, the Reserve Bank on Wednesday tightened norms for digital lending to prevent charging of exorbitant interest rates by certain entities and also check unethical loan recovery practices. Aviation industry stocks will be in focus as the Union Aviation Ministry said limits imposed on domestic airfares will be removed from August 31, after a span of approximately 27 months.

The US markets ended higher on Wednesday after US inflation slowed more than expected in July and raised hopes the Fed will become less aggressive on interest rates hikes. Asian markets are trading mostly in green on Thursday following a strong session on Wall Street overnight.

Back home, Indian equity benchmarks traded in a narrow range with a negative bias for most part of the trading session and ended on a flat note on Wednesday as investors kept their exposure low due to weak global cues. After opening on a positive note, the markets turned choppy through the session, after the latest Union Health Ministry data showed that India Wednesday recorded 16,047 new coronavirus cases and 54 fatalities including six reconciled by Kerala. With these additions, the country's overall Covid figures rose to 4,41,90,697 cases and 5,26,826 deaths. Traders remained cautious with data released by Association of Mutual Funds in India (Amfi) showing that equity mutual funds attracted Rs 8,898 crore in July, a 43 per cent decline compared to the preceding month as markets continued to remain volatile amid concerns over inflation and rate hike expectations. Some concern came with a private report stated that growth in job postings remained flat at 1 per cent in July amidst fears of global recession and inflation, several sectors saw improvement due to digitisation and changing consumer sentiments. Though, downside remained capped as traders found some support with a private report stated that the Indian economy is likely to grow by 7.1% in the current fiscal on the back of steady performance by services, manufacturing and the farm sector. It added that the government investment will play a crucial role in boosting the growth rate. Some support also came in as finance minister Nirmala Sitharaman said the Reserve Bank of India (RBI) has initiated measures to promote the rupee as a preferred currency for international trade settlement, which will boost exports. Besides, Commerce and industry minister Piyush Goyal said negotiations between India and the UK for a FTA is moving at a fast pace, allaying concerns that the evolving political situation in Britain may slow down the pace of talks. Finally, the BSE Sensex fell 35.78 points or 0.06% to 58,817.29 and the CNX Nifty was up by 9.65 points or 0.06% to 17,534.75.